2001 Credit Card Survey

 

Table of Contents

Costs of carrying 'plastic money' continue to grow

By Linda Sherry

Consumer Action's new Credit Card Survey looks at 109 credit cards issued by 45 companies. Widely ranging annual percentage rates (APRs) tagged to applicants' credit histories, increasing use of late fees and penalty APRs for cardholders who don't pay on time and higher cash advance fees and APRs illustrate that carrying plastic is not getting any cheaper.

This year, Consumer Action asked issuers about currency conversion fees for purchases made in foreign currencies, finding that it can cost you an extra 2%-3% to buy things overseas, depending on who issues your card.

Consumer Action now organizes its survey differently, listing cards under the name of their issuer, even if indi-vidual cards are issued on behalf of another bank. For instance, First USA, a subsidiary of Bank One, the number two issuer, issues hundreds of "partner cards." MBNA America Bank, the country's third largest issuer, offers cards on behalf of 4,800 companies, including banks, retailers and private organizations.

Several bank cards that have stood alone in past surveys are now listed under their issuers. These include the cards of Washington Mutual Bank (issued by Associates National Bank); GE Capital Finance Inc., First USA Bank and Wingspan Bank (issued by Bank One); AT&T Universal Card, Associated Bank and Mellon Bank (issued by Citibank), Banco Popular (issued by Direct Merchants Bank) and Central Carolina, Comerica, PNC, SunTrust and Union Planters banks (issued by MBNA).

Research for the survey was conducted during January 2001 by Linda Sherry, Sarah Hinds, Janice Kohn and Matt Lane.

Annual fees

CA's survey includes 84 cards with no annual fees and 25 with fees. The fees range from $12 (Union State Bank) to $98 (Wachovia Bank).

Interest rates

Annual percentage rates (APRs) on all cards surveyed this year averaged 15.16%—about one quarter of a percentage point higher than the average of all cards in late fall of 1999 (14.89%). Part of this increase may be attributable to the effect of the prime rate on the variable cards surveyed. During the survey period in 1999, the prime rate was 8.25%, while it was at 9%-9.50% during the current survey period.

On cards with no annual fees, APRs ranged from 9.90% (see "Low Rate Credit Cards" chart) to 26.49% (Direct Merchants Bank's Banco Popular Card). APRs on annual fee cards ranged from 7.92% (Arkansas National Bank, $50) to 26.49% (Next Card Milestone, $89.95).

Wide range of APRs The trend to new extremes in interest rates first noticed by CA in its 1999 survey continued. In '99, we found the widest range of non-introductory interest rates (7.99%-25.24%) since we began surveying credit cards in the 1970s. But this year's survey revealed an even wider range. The lowest rate card—Arkansas National Bank's 7.92%, with a $50 annual fee—beat 1999's lowest rate by a fraction, while this year's highest rate, Direct Merchant Bank's no-fee Banco Popular Card at 26.49%, topped 1999's high rate card by 1.25%.

Late fees

For the first time in many years, all surveyed banks charge flat late fees, averaging $26. (The average of all banks charging late fees was $25.50 in 1999.) Fleet Bank broke with the pack recently when it increased its late fee to $35. Of other surveyed issuers, 25 (56%) charge the second highest fee, $29.

Penalty rates

Of surveyed issuers, 69% will raise the interest rate on your card if you pay late—a two-year increase of close to 50%. Several banks have a schedule of penalty rates that escalate according to how many payments have been missed. (See "Pay on time or pay the price") The penalty rates identified by CA ranged from 14.50% (Arkansas National Bank) to 29.99% (Associates National Bank, Direct Merchants Bank and Household Bank).

Tiered rates

Almost one-third of surveyed issuers only would quote a range of rates or their highest rates, because they said their APRs are based on each applicant's personal credit history. They are American Express, Associates National Bank, Bank of America, Capital One, Chase Manhattan Bank, Discover Bank, Household Bank, MBNA America, Next Bank, Providian Financial, Provident Bank, US Bank, USAA Federal Savings Bank and Wells Fargo Bank. With these banks, applicants with the best records of handling credit are supposed to get the lowest available rates.

Teasers abound

Introductory rates

Thirty of the banks offered introductory rates ("teasers") on 55 cards. (See "Introductory Rates" chart.) The majority of teaser rates last for six months and many have the same rate on balance transfers. MBNA America Bank doesn't have promotional rates on purchases, but instead offers a lower four-month introductory rate for balance transfers. However, MBNA-issued cards treat balance transfers—even those made when the account is opened—as cash advances, and charge a cash advance fee of $5-$30 for each transfer. Seven surveyed cards have "zero interest" teasers good for various lengths of time. Fleet Bank's Fusion Card offers zero interest only when new cardholders transfer a balance from another credit card. American Express has a 9.99% APR on transferred balances that remains in effect until the balance is paid off.

The costs of cash

Cash advances

When you withdraw cash using your credit card, it's called a "cash advance." Most people have learned the hard way that cash advances begin accruing interest from the time you receive the cash. Many credit cards add insult to injury with cash advance transaction fees and higher cash advance APRs.

Cash advance transaction fees most typically are based on a percentage of the advance, and many cards increased this fee. The majority (51%) charge 3%, an increase from 33% in 1999. Seventeen per cent charge 2% this year, compared to 30% in 1999. Fifteen per cent of surveyed banks charge 4%, up from 11% in 1999. Four banks have no cash advance fees (Ohio Savings, Pulaski Bank & Trust, Simmons First National and USAA Federal Savings Bank).

Seventy eight per cent of the surveyed banks and cards have minimum cash advance fees, which cardholders must pay if the percentage-based fee falls below the minimum fee. For example, if you took a $60 cash advance on a card that charges a cash advance fee of 3%, your cost—excluding interest—would be $1.80. However, if the card issuer has a $3 minimum fee, you would pay $3 instead. Thirty per cent of surveyed banks capped the cash advance fee with a maximum figure.

"This can be a consumer protection of sorts," said surveyor Linda Sherry. "Last year we found that only 23% of banks surveyed had a maximum fee. The bad news is, some maximums are pretty steep—on the high end, we found $50 to $80."

Cash advance APRs

Twenty-seven of the banks and cards surveyed (60%) have higher cash advance APRs, ranging from 18.90% (First National Bank of Omaha) to 26.49% (on some Direct Merchant Bank cards).

Currency conversion fees

Many travelers who use credit cards overseas were outraged when they learned that their card companies added up to 2% to purchases made in foreign currencies. The banks announced the new surcharges via notices stuffed in cardholders' monthly statements in 1998 and 1999. (A number of debit cards also have begun to assess such charges recently.) MasterCard and Visa already take a 1% commission when converting your transaction from foreign currency into U.S. dollars.

For the first time, CA queried card companies about this fee and found that eight issuers add 2% to Master-Card/Visa's 1%, for a total of 3%: Bank of America, Bank One, Citibank, Next Bank, People's Bank, Provident Bank, Providian National Bank, Simmons First National Bank and US Bank.

Providian charges the additional 2% only on its platinum cards, and has actually lowered its fee, which was at one time 4%.

American Express, which is not affiliated with the MasterCard/Visa network, charges its cardholders 2% on foreign currency transactions.

Five other issuers charge an additional 1% on top of the Master-Card/Visa fee: Chase Manhattan Bank, Columbus Bank & Trust's Jupiter Bank, Fleet Bank, Household Bank and Huntington Direct Bank.

Feds target credit card offers

By Linda Sherry

Savvy consumers know how important it is to read the fineprint on credit card solicitations. Now, thanks to the Federal Reserve, you'll be able to accomplish that task without a magnifying glass.

New rules, now voluntary but mandatory as of Oct. 1, are designed to help consumers compare credit terms and to protect consumers against unfair credit card practices. The first rule will be hard to miss: The permanent annual percentage rate (APR) for purchases must be printed in 18 point type. (See type size comparison below.)

image to show the difference in type size between 18 points and 12 points The new rules amend Regulation Z, the Truth in Lending Act, and require that some additional information be included in solicitations in the disclosure table format commonly known as the "Schumer box." Sen. Charles Schumer (D-NY) was the chief sponsor of the Fair Credit and Charge Card Disclosure Act of 1988 that required the table.

For the first time, credit card issuers will be required to reveal not only the APR for purchases, but the rates for cash advances and balance transfers as well. These disclosures must be included in the interest rate table common in most credit card solicitations. The cash advance and balance transfer disclosures must be in at least 12-point type.

A majority of credit card issuers penalize cardholders who pay late by bumping up their interest rates. (This year, Consumer Action found penalty rates as high as 29.99%.) Now the card issuers will have to disclose penalty rates for late payments. The information may be outside the disclosure grid, but must be conspicuous.

The Federal Reserve also targeted Internet sites that allow consumers to apply for credit cards online. The new rules require that applicants be shown a page with all the rate information and must click on an "Accept" button before being allowed to submit an application.

"Anyone who's looked at credit card sites on the web knows that the attractive terms are right up there, while the nitty-gritty can be buried clicks and clicks away," said CA Director of Advocacy Cher McIntyre. "Sometimes you don't see the complete terms until you're halfway into the application. The new Fed rules are going to make it easier to find the facts consumers need to know."

Pay on time or pay the price

By Linda Sherry

The Consumer Action 2000- 2001 Credit Card Survey of 45 issuers and 109 cards finds that all surveyed banks have a late fee. But now more issuers than ever (68%) assess a late fee if your payment is not received by the due date—in other words, they grant no lieniency for late payments.

More than half of surveyed issuers charge late fees of $29, while another 13 hit cardholders with $25 if a payment is late. Fleet Bank broke new ground last year when it increased its late fee to $35—and other banks are likely to follow its lead.

Late fees sting, but there's more painful news: 69% of issuers will raise the interest rate on your card if you pay late. By contrast, only 47% of issuers surveyed by CA in 1998 said they had penalty rate policies. The penalty APRs among surveyed banks ranged from 14.50% (Arkansas National Bank, capped by that state's laws) to 29.99% (Associates National Bank, Direct Merchants Bank and Household Bank).

Cardholders should soon have more information about which companies resort to these punishingly high rates. New federal rules, which become mandatory Oct. 1, require card companies to include penalty rates along with other disclosures typically found in credit card solicitations. (See "Feds target credit card offers".)

Several banks have escalating penalty rates tied to the severity of the late payment. "At least this is fairer than hitting cardholders with one huge jump in the interest rate after only one late payment," said Ken McEldowney of CA. "These banks' policies serve as a warning to consumers, without subjecting them to a staggeringly high interest rate which will only get them deeper in debt."

Surveyed banks with tiered penalty rate policies include:

  • American Express. Optima and Blue cardholders who miss one monthly payment will find their annual percentage rate (APR) raised to 15.99%. When a cardholder misses two payments (60 days late) the APR jumps to 23.99%. (Regular APRs are as low as 9.99% on Optima and 10.99% on Blue, based on the applicant's credit history.)
  • Bank One. First USA card-holders who make one late payment during the introductory rate period will lose their low teaser rate, and the APR will increase to the cardholder's current non-introductory rate. Following that, two late payments in any six-month period will earn First USA cardholders a 19.99% APR. (First USA offers cards with APRs as low as 13.99%.)
  • Bank One. The GE Select Platinum, issued by Bank One's First USA, increases the APR to 16.40% (or other non-introductory rate) if a cardholder pays late during an introductory rate period. If a payment is received late two times in any six-month period, the APR is adjusted to 19.49%. Miss two payments in a row and the rate jumps to 23.99%. (The quoted non-introductory rate on the GE Select Platinum card is 16.40%.)
  • Fleet Bank. Cardholders who fail to make on-time payments twice in any six-month period may find themselves with an APR of 17.99%. Pay late twice in a row and you'll get hit with a 21.99% rate. (Regular APRs are as low as 11.99% on some Fleet cards.)
  • Next Bank. A series of rate hikes awaits delinquent Next Card users. For the company's premier Next Card Plus cardholders, being "delinquent" (one late payment or foray over the card's credit limit) will result in a rate of 17.49%. "Very delinquent accounts" (two late payments in any six-month period) will be increased to 21.49% and "seriously delinquent accounts" (failing to make the minimum payment due for two consecutive billing cycles) will go to 24.49%. Holders of the Next Card Milestone may find themselves with a rate of 28.49% if they are late or over the limit. (The lowest regular Next Card rate is 9.99% for applicants with excellent credit.)

New receipt laws help prevent credit card fraud

By Linda Sherry

Dumpster divers, those thieves who look for credit card receipts and other potentially lucrative information in the garbage, might find themselves out of business in the future. New laws in California and Washington states, and one under discussion in Maryland, require that new cash registers and point-of-sale terminals remove expiration dates and most account numbers from sales slips.

Thieves look for the receipts because the combination of account number and expiration date allows fraudulent use of the account, even without the card. In some cases, counterfeit cards are created using the information.

California's law is now in effect for newly manufactured machines. All older cash registers and terminals that print full account numbers on receipts must be phased out by Jan. 1, 2004. The Washington law will take effect in July.

Many companies already mask some of the numbers on credit and debit card receipts. But many do not, and it's easy enough to leave a receipt lying on a store counter or in a discarded shopping bag. These receipts—as well as all types of personal papers that contain bank or brokerage information or Social Security numbers—can be used to steal your identity and defraud you financially.

Low rate credit cards

By Linda Sherry

Cards with annual fees Cards with no annual fees
APR Fee Bank APR Bank
7.92% $50 Arkansas National Bank 9.90% Bank of America (Platinum), Capital One, Provident Bank, Security First Network Bank (Gold)
8.75% $35 Pulaski Bank & Trust 9.99% American Express (Optima), Next Bank (Next Card Plus), Providian Bank (Aria Platinum)
9.00%   Cards that move with the Prime Rate are offered by Huntington Direct Bank ($75) and Wachovia Bank ($88). 10.00% First Internet Bank - Connect Select
9.95% $50 Simmons First National - Platinum 10.40% Wachovia Bank - Low Rate
10.00% $35 Simmons First National - Classic 10.90% EverBank - Platinum

Consumer Action's 2001 Credit Card Survey

Note: You are prohibited from using Consumer Action's name or any reference to its surveys in advertising or for any other commercial purpose.


AFBA Industrial Bank (888) 277-0444 • www.afba.com


Standard Card

  • Annual Fee : None
  • APR : 11.90% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $15. Over the limit fee: $15. APR is Prime + 2.90%.

AFBA #2

  • Annual Fee : $35
  • APR : 11.50% (Var)
  • Additional Information : Terms same as above. APR is Prime + 2.50%.

Amalgamated Bank of Chicago (800) 723-0303 • www.aboc.com


Standard Card

  • Annual Fee : None
  • APR : 15.50% (Var)
  • Additional Information : Cash advance fee: 2.5%/$2.50 min./$30 max. Late fee: $25. Over the limit fee: $20. APR is Prime + 6.00%.

Amalgamated #2

  • Annual Fee : $37
  • APR : 12.25% (Var)
  • Additional Information : Terms same as above. APR is Prime + 2.75%.

American Express (800) 600-BLUE (2583) • www.americanexpress.com


Blue

  • Annual Fee : None
  • APR : 10.99% to 14.99% (Fix)
  • Additional Information : Grace period: 20 days. Cash advance fee: 3%/$3 min. Late fee: $29. Over the limit fee: $29.

Optima (800) 467-8462

  • Annual Fee : None
  • APR : 9.99% to 12.99% (Fix)
  • Additional Information : Terms same as above.

American Pacific Bank (800) 610-1201


Classic

  • Annual Fee : $18
  • APR : 16.92% (Fix)
  • Additional Information : Cash advance fee: 3%/$5 min. Late fee: $25. Over the limit fee: $25.

Gold Card

  • Annual Fee : $35*
  • APR : 13.92% (Fix)
  • Additional Information : Cash advance fee: 3%/$10 min. Other terms same as above. *Annual fee waived for first year.

AmTrust Bank (888) 268-7878 • www.amtrust.com


Classic Fixed

  • Annual Fee : None
  • APR : 14.75% (Fix)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $25. Over the limit fee: $15.

Classic Variable

  • Annual Fee : $22
  • APR : 12.75% (Var)
  • Additional Information : Terms same as above. APR is Prime + 3.75%.

Platinum Card

  • Annual Fee : None
  • APR : 12.99% (Fix)
  • Additional Information : Terms same as above.

Arkansas National Bank (888) 226-5262 • www.arknatl.com


  • Annual Fee : $50
  • APR : 7.92% (Fix)
  • Additional Information : Cash advance fee: $5. Late fee: $25. Over the limit fee: $25.

Associates National Bank (800) 842-2348 • www.theassociates.com


Standard Card

  • Annual Fee : None
  • APR : 12.99% to 22.00% (Var)
  • Additional Information : Cash advance fee: 4%/$5 min. Late fee: $29. Over the limit fee: $29. APR varies according to Prime Rate.

Washington Mutual Bank (800) 382-3334 • www.wamu.com

  • Annual Fee : None*
  • APR : 13.99% to 25.99% (Var)
  • Additional Information : Cash advance fee: 3%/$3 min. APR is Prime + 4.99%-16.99%. *Some applicants may be asked to pay an annual fee, based on their credit history. Other terms same as above.

Bank One (888) 221-9067 • www.bankone.com


Standard Card

  • Annual Fee : None
  • APR : 15.90% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee: 3%/$5 min./$50 max. Late fee: $29. Over the limit fee: $29. APR is Prime + 6.90%.

First USA Bank (800) 955-9900 • www.firstusa.com

  • Annual Fee : None
  • APR : 13.99% (Var)
  • Additional Information : ATM cash advance fee: 3%/$10 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 4.49%.

GE Select Platinum Card (888) 738-3115 • www.ge.com

  • Annual Fee : None
  • APR : 16.40% (Var)
  • Additional Information : Grace period: 20-25 days. Other terms same as above. APR is Prime + 6.90%.

WingSpan Bank - Tier 1 (888) 736-8611

  • Annual Fee : None
  • APR : 15.40%* (Var)
  • Additional Information : Terms same as above. APR is Prime + 5.90%. *Wingspan Bank will assign either rate based on applicant's credit history.

Wingspan Bank - Tier 2

  • Annual Fee : None
  • APR : 17.99%* (Var)
  • Additional Information : Terms same as above. APR is Prime + 8.49%. *Wingspan Bank will assign either rate based on applicant's credit history.

California Bank & Trust (800) 356-4536 • www.calbanktrust.com


Classic Card

  • Annual Fee : $18
  • APR : 16.90% (Fix)
  • Additional Information : Cash advance fee: 2%/$3 min. Late fee: $10. Over the limit fee: $10.

Platinum Card

  • Annual Fee : $25*
  • APR : 12.00% (Fix)
  • Additional Information : Terms same as above. *Annual fee waived for first year.

Capital One (800) 548-4593 • www.capitalone.com


  • Annual Fee : None
  • APR : 9.90% to 19.80% (Fix)
  • Additional Information : Cash advance fee: 2.5%/$2.50 min. Late fee: $25. Over the limit fee: $25.

Centura Bank (800) 236-8872 • www.centura.com


Classic

  • Annual Fee : None
  • APR : 15.49% (Var)
  • Additional Information : Cash advance fee: 3.5%/$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 6.49%.

Centura Gold Card

  • Annual Fee : None
  • APR : 14.49% (Var)
  • Additional Information : Terms same as above. APR is Prime + 5.49%.

Chase Manhattan Bank (800) 724-7819 • www.chase.com


Classic

  • Annual Fee : None
  • APR : 15.49% to 18.49% (Var)
  • Additional Information : Grace period: 22 days. Cash advance fee: 3%/$3-$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 6.49%-9.49%. Lower rates are for bank customers and cardholders with balances of more than $2,500.

Platinum Card

  • Annual Fee : None
  • APR : 13.49% to 16.49% (Var)
  • Additional Information : Terms same as above. APR is Prime + 4.49%-7.49%.

Citibank


AT&T Universal Card (800) 423-4343 • www.universalcard.com

  • Annual Fee : None
  • APR : 16.90% (Var)
  • Additional Information : Cash advance fee: 3%/$10 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 7.90%.

Associated Bank (800) 472-7708 • www.assocbank.com

  • Annual Fee : None
  • APR : 12.90% (Var)
  • Additional Information : Cash advance fee: 3%/$5 min./$35 max. Late fee: $29. Over the limit fee: $29. APR is Prime + 3.90%.

Citi Platinum Select (800) 950-5114 • www.citibank.com

  • Annual Fee : None
  • APR : 16.49% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee: 3%/$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 6.99%.

Mellon Bank (800) 774-2173 • www.mellon.com

  • Annual Fee : None
  • APR : 17.49% (Var)
  • Additional Information : Grace period: 20 days. APR is Prime + 7.99%. Other terms same as above.

Mellon Platinum Card

  • Annual Fee : None
  • APR : 15.49% (Var)
  • Additional Information : APR is Prime + 5.99%. Other terms same as above.

Columbus Bank & Trust (800) 543-8227 • www.columbusbankandtrust.com


Classic Card

  • Annual Fee : None*
  • APR : 16.90% (Var)
  • Additional Information : Cash advance fee: 2%/$50 max. Late fee: $25. Over the limit fee: $25. APR is Prime + 7.90%. *Annual fee is $25 if cardholder makes fewer than six transactions per year.

Columbus Gold Card

  • Annual Fee : None*
  • APR : 14.90% (Var)
  • Additional Information : Terms same as above. APR is Prime + 5.90%. *See note above.

Columbus Platinum Card

  • Annual Fee : None*
  • APR : 12.90% (Var)
  • Additional Information : Terms same as above. APR is Prime + 3.90%. *See note above.

Juniper Bank (888) 232-0780 • www.juniper.com

  • Annual Fee : None
  • APR : 13.99% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$20 max. Late fee: $19. No over the limit fee. APR is Prime + 4.49%. Not available in Iowa or Puerto Rico.

Direct Merchants Bank (888) 642-2626 • www.bppr.com


Banco Popular Classic

  • Annual Fee : None
  • APR : 26.49% (Var)
  • Additional Information : Cash advance fee: 4%/$4-$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 16.99%.

Banco Popular Gold

  • Annual Fee : None
  • APR : 16.49% (Var)
  • Additional Information : Terms same as above. APR is Prime + 6.99%

Banco Popular Platinum

  • Annual Fee : None
  • APR : 11.49% (Var)
  • Additional Information : Terms same as above. APR is Prime + 1.99%

Discover Bank (800) 474-2273 • www.discovercard.com


Discover Card Classic

  • Annual Fee : None
  • APR : 14.99%* (Fix)
  • Additional Information : Cash advance fee: 3%/$5 min. Late fee: $29. Over the limit fee: $29. *APR is based on applicant's credit history.

Private Issue Cardwww.novusnet.com

  • Annual Fee : None
  • APR : 11.99% (Fix)
  • Additional Information : Terms same as above.

EverBank (888) 882-3837 • www.everbank.com


Platinum

  • Annual Fee : None
  • APR : 10.90% (Var)
  • Additional Information : Cash advance fee: 2.5%/$2.50 min. Late fee: $25. Over the limit fee: $20. APR is Prime + 1.90%.

Fidelity National Bank (800) 753-2900 • www.fidelitynational.com


Standard Card

  • Annual Fee : None
  • APR : 17.90% (Var)
  • Additional Information : Grace period: 23 days. Cash advance fee: 4%/$5 min. Late fee: $25. Over the limit fee: $25. APR is Prime + 8.90%.

Fidelity Gold Card

  • Annual Fee : None
  • APR : 15.90% (Var)
  • Additional Information : Terms same as above. APR is Prime + 6.90%.

First Internet Bank (888) 873-3424 • www.firstib.com


Connect Classic Card

  • Annual Fee : None
  • APR : 12.00% (Fix)
  • Additional Information : Cash advance fee: 2%/$10 max. Late fee: $15.50. Over the limit fee: $20.

Connect Select

  • Annual Fee : None
  • APR : 10.00% (Fix)
  • Additional Information : No grace period. Other terms same as above.

First National Bank of Omaha (800) 688-7070 • www.firstbankcardcenter.com


Fixed Rate Card

  • Annual Fee : None
  • APR : 13.99% (Fix*)
  • Additional Information : Cash advance fee: 3%/$10 max. Late fee: $29. Over the limit fee: $29. *Decision to grant fixed or variable APR is based on applicant's credit history.

Variable Rate Card

  • Annual Fee : None
  • APR : 13.99% (Var)
  • Additional Information : Terms same as previous card. APR is LIBOR + 8.00%.

First Union National Bank (800) 377-3404 • www.firstunion.com


Standard Card

  • Annual Fee : None
  • APR : 17.40% (Var)
  • Additional Information : Cash advance fee: 3.95%/$5 min./$80 max. Late fee: $29. Over the limit fee: $29. APR is Prime + 7.90%.

First Union Gold Card

  • Annual Fee : None
  • APR : 15.90% (Var)
  • Additional Information : Terms same as above. APR is Prime + 6.40%.

First Union Platinum

  • Annual Fee : None
  • APR : 14.40% (Var)
  • Additional Information : Terms same as above. APR is Prime + 4.90%.

Firstar Corporation (800) 320-2282 • www.firstar.com


Elan Card

  • Annual Fee : $20*
  • APR : 17.40% (Var)
  • Additional Information : Cash advance fee: 3%/$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 7.90%. *Annual fee charged only if no purchases are made with the card.

Elan Platinum Card

  • Annual Fee : $40*
  • APR : 16.40% (Var)
  • Additional Information : Terms same as above. *See note above.

Fleet Bank (800) 225-5353 • www.fleet.com


Standard Card

  • Annual Fee : None
  • APR : 16.99% (Var)
  • Additional Information : Grace period: 20 days. Cash advance fee: 4%/$5 min. Late fee: $35. Over the limit fee: $29. APR is LIBOR + 10.33%.

Fusion Card

  • Annual Fee : None
  • APR : 11.99% (Var)
  • Additional Information : Terms same as above. APR is LIBOR + 5.33%.

Platinum Card

  • Annual Fee : None
  • APR : 13.99% (Var)
  • Additional Information : Terms same as above. APR is LIBOR + 7.33%.

Helena National Bank (888) 338-6451 • www.hnb.com


  • Annual Fee : $15
  • APR : 10.44% (Var)
  • Additional Information : Cash advance fee: $2. Late fee: 5% of amount due. Over the limit fee: 10% of amount due. APR is Federal Discount Rate + 5.00%.

Household Bank (800) 477-6000 • www.hbcard.com


Standard Card

  • Annual Fee : None
  • APR : 14.75% (Var)
  • Additional Information : Grace period: 20 days. ATM cash advance fee: 4%/$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 6.25%.

Gold Card

  • Annual Fee : $29-$39*
  • APR : 14.75% (Var)
  • Additional Information : Terms same as above. *Annual fee is based on applicant's credit history.

GM Rewards Card (800) 846-2273 • www.gmcard.com

  • Annual Fee : None
  • APR : 19.49%* (Var)
  • Additional Information : Terms same as above. APR is Prime + 9.99%. *APR is based on applicant's credit history.

HSBC Bank USA (800) 975-4722 • www.us.hsbc.com


Standard Card

  • Annual Fee : None
  • APR : 19.80% (Fix) or 18.40% (Var)
  • Additional Information : Cash advance fee: 3%/$3 min. Late fee: $25. Over the limit fee: 5%/$25 min. APR is Prime + 8.90%. (Applicants must live in CA, CT, FL, NJ, NY or PA).

Platinum Card

  • Annual Fee : None
  • APR : 19.80% (Fix) or 16.40% (Var)
  • Additional Information : Terms same as above. APR is Prime + 6.90%.

Huntington Direct Bank (800) 480-2265 • www.huntington.com


Standard Card

  • Annual Fee : None
  • APR : 18.49% (Var)
  • Additional Information : Grace period: 22 days. Cash advance fee: 3%/$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 9.49%.

Gold Card

  • Annual Fee : None
  • APR : 14.49% or 16.49% (Var)
  • Additional Information : Terms same as above. APR is Prime + 7.49% if balance is less than $2,500, and Prime + 5.49% if balance is higher.

Platinum Card

  • Annual Fee : None
  • APR : 13.49% or 15.49% (Var)
  • Additional Information : Terms same as above. APR is Prime + 6.49% if balance is less than $2,500, and Prime + 4.49% if balance is higher.

Platinum Prime Card

  • Annual Fee : $75
  • APR : 9.00% (Var)
  • Additional Information : Terms same as above. APR is Prime Rate.

MBNA America Bank* (800) 932-2775 • www.mbnaamerica.com


Platinum Plus Card

  • Annual Fee : None
  • APR : 15.99% (Fix)
  • Additional Information : Cash advance fee: 3%/$5 min./$30 max. (Maximum applies only to balance transfers and checks; ATM cash advances have no maximum.) Late fee: $29. Over the limit fee: $29. *MBNA issues 4,800 cards, including several listed here for banks that were included in prior years' surveys.

America's Card

  • Annual Fee : None
  • APR : 16.99% (Fix)
  • Additional Information : Terms same as above.

Barnes & Noble Card

  • Annual Fee : None
  • APR : 13.99% (Fix)
  • Additional Information : Terms same as above.

Central Carolina Bank Card (800) 422-2226

  • Annual Fee : None
  • APR : 13.99% (Fix)
  • Additional Information : Terms same as above.

Comerica Bank Card (800) 292-1300 • www.comerica.com

  • Annual Fee : None
  • APR : 13.99% (Fix)
  • Additional Information : Terms same as above.

LL Bean Cardwww.llbean.com

  • Annual Fee : None
  • APR : 16.99% (Fix)
  • Additional Information : Terms same as above.

PNC Bank Card (800) 545-7899

  • Annual Fee : None
  • APR : 15.99% (Fix)
  • Additional Information : Terms same as above.

SunTrust Bank Cardwww.suntrust.com

  • Annual Fee : None
  • APR : 14.99% (Fix)
  • Additional Information : Terms same as above.

Union Planters Bank Card (800) 545-7899 • www.unionplanters.com

  • Annual Fee : None
  • APR : 15.99% (Fix)
  • Additional Information : Terms same as above.

Metropolitan Bank & Trust (800) 837-6058 • www.metrobankandtrust.com


  • Annual Fee : None
  • APR : 13.90% (Fix)
  • Additional Information : Cash advance fee: 2%/$10 min. Late fee: $20. Over the limit fee: $20.

Next Bank (Apply on Internet) • www.nextcard.com


Next Card Plus

  • Annual Fee : None*
  • APR : 9.99% (Fix)
  • Additional Information : Cash advance fee: 3%. Late fee: $29. Over the limit fee: $29. *Company offers applicants "customized" card terms to choose from—some offers have an annual fee.

Next Card Horizon

  • Annual Fee : None*
  • APR : 24.49% (Var)
  • Additional Information : Terms same as above. APR is Prime + 14.99%. *See note above.

Next Card Milestone

  • Annual Fee : $89.95
  • APR : 26.49% (Var)
  • Additional Information : Terms same as above. APR is Prime + 16.99%.

Ohio Savings Bank (800) 987-6446 • www.ohiosavings.com


Classic Variable Card

  • Annual Fee : $22
  • APR : 12.75% (Var)
  • Additional Information : No cash advance fee. Late fee: $25. Over the limit fee: $15. APR is Prime + 3.75%.

Classic Fixed Card

  • Annual Fee : None
  • APR : 14.75% (Fix)
  • Additional Information : Terms same as above.

Platinum Card

  • Annual Fee : None
  • APR : 12.99% (Fix)
  • Additional Information : Terms same as above.

People's Bank (877) 525-9248 • www.peoples.com


US Ski Team Card

  • Annual Fee : None
  • APR : 16.90% (Fix)
  • Additional Information : Cash advance fee: 3%/$3 min. Late fee: $29. Over the limit fee: $29.

Long Island Sound Card

  • Annual Fee : None
  • APR : 14.90% (Fix)
  • Additional Information : Terms same as above.

Premiere Platinum Card

  • Annual Fee : None
  • APR : 13.90% (Fix)
  • Additional Information : Terms same as above.

Provident Bank (800) 895-1404


  • Annual Fee : None
  • APR : 9.90% to 24.00% (Var)
  • Additional Information : Cash advance fee: 2.90%/$3 min./$50 max. Late fee: $29. Over the limit fee: $29. APR varies with Prime Rate.

Providian National Bank (Apply on Internet) • www.aria.com


Aria Persona

  • Annual Fee : $59 or $89*
  • APR : 23.99% (Fix)
  • Additional Information : Cash advance fee: 3%/$5 min. Late fee: $29. Over the limit fee: $29. *Annual fee is based on applicant's credit history. May also require a one-time processing fee of up to $49.

Aria Platinum

  • Annual Fee : None
  • APR : 9.99% (Var)
  • Additional Information : Terms same as above. APR is Prime + 0.49%.

Aria Portrait

  • Annual Fee : None
  • APR : 20.49% (Var)
  • Additional Information : Terms same as above. APR is Prime + 10.99%.

Providian Gold Card (800) 252-6170

  • Annual Fee : $59
  • APR : 23.99% (Fix)
  • Additional Information : Card has fixed rate. Other terms same as above.

Providian Platinum Card (800) 252-6170

  • Annual Fee : None
  • APR : 12.99% or 16.99%* (Fix)
  • Additional Information : Terms same as above. *APR based on applicant's credit history.

Pulaski Bank & Trust (800) 980-2265 • www.pulaskibank.com


  • Annual Fee : $35*
  • APR : 8.75% (Fix)
  • Additional Information : No cash advance fee. Late fee: $29. Over the limit fee: $29. *Gold card has a $50 annual fee.

Roslyn Savings Bank (800) 545-7899 • www.roslyn.com


Standard Card

  • Annual Fee : None
  • APR : 18.90% (Fix)
  • Additional Information : Cash advance fee: 3%/$5 min./$30 max. Late fee: $29. Over the limit fee: $29.

Platinum Card

  • Annual Fee : None
  • APR : 16.99% (Var)
  • Additional Information : Terms same as above. APR is Prime + 7.40%.

Security First Network Bank (Apply on Internet) • www.sfnb.com


Classic Card

  • Annual Fee : None
  • APR : 12.90% (Fix)
  • Additional Information : Cash advance fee: 2%/$50 max. Late fee: $15. Over the limit fee: $10.

Gold Card

  • Annual Fee : None
  • APR : 9.90% (Fix)
  • Additional Information : Terms same as above.

Simmons First National (800) 272-2102 • www.simmonsfirst.com


Standard Card

  • Annual Fee : $35*
  • APR : 10.00% (Var)
  • Additional Information : No cash advance fee. Late fee: $29. Over the limit fee: $29. APR is Federal Discount Rate + 5.00%. *Annual fee is $25 for Arkansas residents.

Platinum Card

  • Annual Fee : $50
  • APR : 9.95% (Var)
  • Additional Information : Terms same as above.

Union State Bank (800) 887-8775 • www.unionstate.com


Standard Card

  • Annual Fee : $12
  • APR : 15.90% (Var)
  • Additional Information : Cash advance fee: 2%/$2 min./$10 max. Late fee: $20. Over the limit fee: $25. APR is Prime + 6.90%.

Gold Card

  • Annual Fee : None
  • APR : 15.90% (Var)
  • Additional Information : Terms same as above.

US Bank (800) 285-8585 • www.usbank.com


Standard Card

  • Annual Fee : $20*
  • APR : 13.40% to 19.40% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee: 3%/$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 3.90%-9.90%. *Annual fee waived with $3,000 in annual purchases.

Platinum Card

  • Annual Fee : None
  • APR : 11.40% to 15.40% (Var)
  • Additional Information : Terms same as above. APR is Prime + 1.90%-5.90%.

USAA Federal Savings Bank (800) 922-9092


  • Annual Fee : None
  • APR : 13.40% to 19.90% (Var)
  • Additional Information : No grace period. No cash advance fee. Late fee: $20. No over the limit fee. APR is Prime + 4.40%-10.90%.

Wachovia Bank (800) 716-3000 • www.wachovia.com


Low Rate Card

  • Annual Fee : None
  • APR : 10.40% (Var)
  • Additional Information : Grace period: 20 days. Cash advance fee: 4%/$5 min. Late fee: $29. Over the limit fee: $29. APR is Prime + 1.40%.

Prime 4 Life Classic Card

  • Annual Fee : $88
  • APR : 9.00% (Var)
  • Additional Information : Terms same as above. APR is Prime.

Prime 4 Life Gold Card

  • Annual Fee : $98
  • APR : 9.00% (Var)
  • Additional Information : Terms same as above. APR is Prime.

Wells Fargo Bank (800) 642-4720 • www.wellsfargo.com


Standard Card

  • Annual Fee : None
  • APR : 13.50% to 18.90% (Var)
  • Additional Information : Grace period: 20-25 days. Cash advance fee: 4%/$3 min. (ATM)/$5 min. (Checks). Late fee: $29. Over the limit fee: $29. APR is Prime + 4.00%, 7.40% or 9.40%.

Introductory rates at time of survey

Key to chart

  • ** - Rate lasts 2- 4 months
  • ^ - Rate good through August, 2001
  • + - Rate lasts 5 - 6 months
  • * - Rate in effect until transfer is paid off
  • # - Rate lasts 9 months - 1 year
  • ++ - Must transfer a balance
Credit Card Promotional Rate Rate for Transfers
American Express No interest + 9.99% *
    Blue Optima No interest + 9.99% *
AmTrust - Classic 6.90% +  
    Platinum 4.90% +  
Associated Bank No interest # 5.90% #
Bank of America 3.90% + Same
BankOne 2.90% + Same
    First USA 2.90% + Same
    GE Select Platinum 1.90% + Same
    Wingspan   1.90% +
Capital One No interest ^ Same
Centura Bank - Gold 4.90% + Same
Chase - Classic 5.99% Same
    Platinum 2.99% 3.90% #
Citibank - AT&T Universal   3.90% #
    Citi Platinum Select   5.99% +
    Mellon Bank No interest + Same
Columbus Bank & Trust 5.90% +  
    Juniper Bank 2.90% ** Same
    Columbus - Platinum 3.90% + Same
Direct Merchants - Banco Popular 6.99% +  
Discover Card 1.90% ++ Same
Fidelity - Standard 9.90% + Same
    Gold 5.90% + Same
First National Bank of Omaha 5.90% +  
First Union 9.90% + Same
Firstar - Elan 5.90% +  
Fleet Bank 1.99% +  
    Fusion No interest ++  
Household 3.90% + Same
    GM Rewards 3.90% + Same
HSBC Bank 5.90% +  
Huntington Direct -Gold/Classic 5.99% +  
    Platinum 4.99% +  
MBNA - America's Card   5.90% **
    Barnes & Noble   2.90% **
    Central Carolina Bank   3.90% **
    Comerica Bank   3.90% **
    LL Bean   3.90% **
    Platinum Plus   3.90% **
    PNC Bank   3.90% **
    SunTrust   4.90% **
    Union Planters Bank   3.90% **
Next Card Horizon 2.99% **  
Ohio Savings Bank 4.90% **  
    Classic Fixed 6.90% +  
People's Bank 4.90% +  
Providian - Platinum 2.90% **  
    Aria Card No interest **  
Roslyn Savings - Classic 5.90% +  
    Platinum 3.90% +  
Security First Network Bank 3.90% +  
Union State Bank 7.90% # Same
US Bank 5.90% + Same
Wells Fargo Bank 5.90% +  

Cardholder actions bring relief from unfair practices

By Sarah Hinds

In two important victories for credit cardholders, Providian National Bank and First USA Bank will pay out substantial class action settlements in the months to come.

The legal actions arose over anti-consumer practices, including unfair late fees, deceptive marketing and failure to adequately disclose key terms and conditions.

San Francisco-based Providian has agreed to pay $105 million to cardhold-ers to compensate for deceptive mar-keting and sales procedures. Those who qualify as class members for this suit will be contacted in the spring of this year.

First USA, based in Wilmington, Delaware, made $39 million available for compensation to some of its cardholders. The money settled a suit, now closed to new class members, which alleged that First USA stuck some cardholders with unfair late fees. In addition, First USA will pay to administer the settlement and pick up plaintiffs' legal fees, for a total of approximately $45 million.

The class action suit against Providian, which is in its final stages, stems from consumer complaints over deceptive sales practices by the bank. The practices include sales of optional products, such as coupons and credit protection, which were marketed deceptively or just added to cardhold-ers' accounts without permission. One of these so-called "add-on products" was a coupon book touting savings on movies and electronics that actually cost each cardholder $120 a year.

"Providian targeted credit-impaired people, got them to sign up for the card, and then added charges for these worthless products," said Robert Green of Girard and Green, a San Francisco firm that served as co-counsel for cardholders in the suit. He charged that Providian made it difficult to stop unwanted or unauthorized charges when cardholders complained. "Once the charge went on your card, you were fighting an uphill battle" to get rid of it, said Green.

The charges against First USA Bank stemmed from complaints by cardholders that they had sent their payments in on time, yet were still being charged late fees. During a period of 20 months in 1998-1999, First USA used a third-party processor to handle billing and payments. Lawyers alleged that this third party violated cardholders' rights by charging unlawful late fees. For example, First USA's cardmember agreement stated that payments must arrive by 10 a.m. on the due date to be considered on-time. However, many cardholders ended up with late fees when their payments were processed before 6 a.m. on the due date.

Providian and First USA are not the only banks to feel the sting of consumer outrage against unfair practices. A suit brought against Fleet Bank in October, which has not gone to trial, accused the bank of false advertising and deceptive trade practices because it increased a cardholder's "fixed" APR after less than a month.

In January of this year a class action suit was filed against Capital One, alleging that the bank charged illegal late and over the limit fees, and failed to properly disclose all of its policies. (For more information about these two cases, visit the web site of Lieff, Cabraser, Heimann & Bernstein, at www.lchb.com.)

Last year also saw several legal actions settled by card issuers:

  • In July, Citibank agreed to make available $45 million to compensate cardholders for illegal late fees and finance charges.
  • In September, Chase Manhattan paid over $22.2 million to consumers who objected to its early morning deadline for posting transactions received on the due date. As a result, Chase changed its cut-off time to noon and now gives cardholders one day's leniency before it charges a late fee. Claims in this suit ended Jan. 31.
  • Also in September, MBNA America agreed to pay over $6.4 million to cardholders as a result of a suit alleging that its balance transfer offers were deceptive. Claims in this suit ended Feb. 1, 2001.

Will things change?

Will million dollar settlements force credit card companies to change their practices? Green is hopeful: "When companies see this amount of money being paid out, it has to hurt. What really matters to them is their bottom line, and settlements like this threaten that bottom line."

One of the attorneys who brought the First USA suit, Steven Katz, of the St. Louis firm Carr, Korein, Tillery, Kunin, Montroy, Cates, Katz & Glass, also thinks these settlements may bode well for the consumer. "I think credit card companies will be more careful in future, because the credit card industry is very competitive, and cases like this cause a great deal of bad publicity."

Arbitration requirements

Despite the positive changes for consumers that these suits bring, cardholders may find their power to sue their credit card company eroded by arbitration clauses. During arbitration, disputes are taken to a panel of arbitrators, often retired judges, for a decision. If a company requires binding arbitration, as they do increasingly, all parties must agree to abide by the decision instead of going to court. Consumers not only give up their right to a trial by judge or jury, but also any rights of appeal.

Consumer advocates argue that binding arbitration clauses unfairly imit consumers' rights, and don't belong in contracts involving consumers. "Binding arbitration clauses make sense in business-to-business transactions, but not in contracts with consumers," agreed Katz.

Unfortunately, arbitration clauses make class action suits against credit card companies more of a challenge. Katz commented, "It's getting very difficult to sue credit card companies as a result of arbitration clauses."

Credit card tricks and traps

By Sarah Hinds

Plastic user beware! Consumer Action's list of the sneaky things credit card companies do to get your money grows longer every year. Here we present some of the tricks and traps they could spring on you—be forewarned, and arm yourself against the next round of attacks on your wallet..

Slippery APRs

  • Lots of credit card companies won't tell you the exact terms of the card until you apply. When you apply for credit, the issuer checks your credit report. Each time this happens, it is recorded on your credit report as an "inquiry," and too many inquiries can make your credit look bad. Don't apply for a card unless you know what the terms are in advance—it's not worth your good credit.
  • That low rate you're quoted might have big-time conditions. If you fail to qualify for that rate because of your credit history, they'll give you a higher one. Sometimes you have to have another account or investments with the bank to get the quoted rate.
  • Most cards have a much higher APR on cash advances, in addition to a fee for the advance.
  • Some banks have a higher APR if you apply online because they feel they are taking a risk. One bank in this year's survey applies a variable APR of Prime + 6.9% to online applications, compared with an APR of Prime + 2.9% for standard written or phone applications.
  • Penalty rate increases might get you if you pay late. Also, watch out for late payments while you have an introductory rate; even one late payment might send you up to the non-introductory APR.
  • After reviewing your credit report, some banks will raise your APR based on your payment history with other credit cards and loans.

Changes in terms

  • It seems like your credit limit gets raised every time you turn around. High limits do not look good on your credit report. In lenders' eyes, the higher your total credit limit, the greater the possibility for debt. Ask your issuer to lower your limit.
  • Changes in rates and terms often arrive in the form of easy-to-overlook "bill stuffers." Read this stuff: issuers are only required to give you 15 days advance notice before changing policies, including raising "fixed" rates. By using the card again, you have agreed to the new terms even if you haven't read them.
  • Bank mergers often mean that your APR will go up, so watch for notices of changes in terms.

Fees, fees, fees

  • These days, most issuers require that your payment arrive before a certain time on the due date, or you'll be charged to a late fee. Don't take any chances: the majority of cards surveyed this year charge $29 for late payments.
  • Even if you pay your balance in full, you may have to pay extra interest if your payment is late.
  • You risk losing "rewards," such as frequent flyer miles, if you pay your bill late.
  • Contrary to what many people believe, a purchase that takes you over your credit limit will not necessarily be denied. Instead, you'll be stuck with an over the limit fee, which will be assessed every month until your balance is back under the limit.
  • Make sure you have the money in your account to cover your payment. If your check bounces, your credit card issuer will likely charge you a returned check fee of $20-$29.
  • Before traveling abroad, check your issuer's currency exchange fee that's added whenever you use the card in a foreign country. Visa and Mastercard will charge you a 1% currency conversion fee on each transaction—your bank may add its own fee.
  • When you use the checks that your card issuer sends you, you're likely to find yourself saddled with a cash advance fee and a higher interest rate on the amount advanced to you.

Balance transfers

  • When you make a balance transfer to get a better rate, your credit card company can apply your payments to the low-rate portion of your balance before the high-rate portion.
  • Fees on balance transfers. If your issuer treats balance transfers as cash advances, you could wind up paying a hefty fee. For example, if you transfer $5,000, a 3% balance transfer fee would cost you $150.
  • Balance transfers begin accruing interest as soon as they are posted to your account, even if you do not have a prior balance—there is no grace period.

Fighting back

  • Call your credit card issuer and ask them to reduce your APR. If you have a good payment history, issuers will often lower your rate. Most issuers also will work with you if you need to change your due date.
  • Read the fine print! Information about everything from rate increases to your right to sue is in the fine print. There's a reason this information is in small print—credit card companies don't want you to read it!
  • Pay your bill as soon as you can—you'll save the worry about late fees.
  • Pay as much of your outstanding balance as you can, not just the minimum payment. Minimum payments are designed to keep you in debt for a long, long time.

Identify yourself with a new chip-embedded 'smart card'

By Linda Sherry

Are credit cards with embedded computer microchips going to the head of the class? Four large card issuers are betting they will, although in the U.S. the concrete benefits you get from carrying a "smart card" currently are limited to heightened security for online transactions.

American Express, Bank One's First USA, Fleet Bank and Providian Financial all offer credit cards with microchips built in along with the traditional magnetic stripe. The American Express Blue card has proved very popular since its launch in 1999. The other issuers are marketing smart cards in alliance with Visa USA.

For now, the chip is called on only when cardholders make online purchases. The cards work with a "reader," an external device that hooks up to your PC—Macs aren't eligible yet. The card-reader combo allows online businesses to identify you by asking for a personal identification number (PIN). You also can cut steps when you shop online using an "electronic wallet" feature that stores user names, online passwords and billing and shipping information.

"We believe it's clear that chip-based cards will become the standard in the U.S., as they've proven to be in Europe and parts of Asia," said Alan Elias, vice president for corporate communications at Providian Financial.

"For now, smart cards offer greater security and efficiency for Internet transactions," said Elias. "We'll see other benefits in the near future. The chip allows the consumer and merchant to do a lot of interesting things, like loyalty rebate programs, mass transit fares and instant discount coupons."

You can apply for all the cards online, except for Providian's card, which is currently by invitation only. If you are interested in its Visa—a futuristic looking clear plastic card—you can sign up on the Providian web site (providian.com) for notification when you can apply. Elias said the company expects to accept applications in the next few months. Cardholders can purchase Providian's reader for $19.95.

American Express accepts applications for Blue at americanexpress.com. First USA's Smart Visa applications are at firstusa.com. Fleet is offering free readers with the cards through March 31. First USA's free reader offer is ongoing at press time.

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